UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2003

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

From the transition period from ____________ to ____________

Commission File Number 001-14015

                            U.S. HOME & GARDEN INC.
             (Exact name of registrant as specified in its charter)

             Delaware                                          77-0262908
  (State or other jurisdiction                                IRS Employer
of incorporation or organization)                        (Identification Number)

655 Montgomery Street
San Francisco, California                                        94111
(Address of Principal Executive Offices)                       (Zip Code)

                                 (415) 616-8111
              (Registrant's Telephone Number, Including Area Code)

Indicate by check whether the registrant: (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes |X| No |_|

Indicate by check whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act).

                                 Yes |_| No |X|

Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

As of May 12, 2003 there were 17,951,090 shares of the issuer's common stock,
par value $.001 per share, outstanding.
<PAGE>

Part I. - Financial Information

Item 1. - Consolidated Financial Statements

Consolidated balance sheets as of March 31, 2003 (Unaudited)                 1-2
and June 30, 2002

Consolidated statements of operations for the three months and                 3
nine months ended March 31, 2003 and 2002 (Unaudited)

Consolidated statements of cash flows for the nine months                    4-5
ended March 31, 2003 and 2002 (Unaudited)

Notes to consolidated financial statements                                  6-11

Item 2. - Management's Discussion and Analysis of Financial                12-20
Condition and Results of Operations

Item 3. - Quantitative and Qualitative Disclosures About Market Risk          20

Item 4. - Controls and Procedures                                             20

Part II. - Other Information

Item 5. - Other Information                                                20-21

Item 6. - Exhibits and Reports on Form 8-K                                    21

Signatures                                                                    21

Certifications                                                             22-23
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                                     Consolidated Balance Sheets

================================================================================

<TABLE>
<CAPTION>
                                                                      March 31, 2003     June 30, 2002
                                                                      --------------     -------------
                                                                       (Unaudited)
<S>                                                                    <C>                <C>
Assets

Current
     Cash and cash equivalents                                         $    479,000       $   219,000
     Accounts receivable, less allowance for doubtful
         accounts and sales returns of $1,131,000 and $1,635,000         27,261,000        26,243,000
     Inventories                                                         12,498,000         8,023,000
     Prepaid expenses and other current assets                              877,000           988,000
     Refundable income taxes                                                137,000           405,000
     Deferred tax asset                                                     688,000           688,000
     Current assets of discontinued operations                              214,000         1,052,000
-----------------------------------------------------------------------------------------------------

Total Current Assets                                                     42,154,000        37,618,000

Property and Equipment, net                                               4,317,000         4,850,000

Intangible Assets
     Goodwill, net                                                       49,878,000        49,861,000
     Deferred financing costs, net of accumulated
         amortization of $939,000 and $578,000                            4,093,000         3,570,000
     Non-compete agreements, net of accumulated
         amortization of $676,000 and $407,000                              834,000         1,103,000
     Package tooling costs, net of accumulated
         amortization of $2,266,000 and $1,860,000                        1,237,000         1,216,000
     Product rights, patents and trademarks, net of
         accumulated amortization of $195,000 and $163,000                  477,000           509,000

Officer Receivables                                                         512,000           512,000

Property and Equipment of Discontinued Operations
     Held For Sale                                                               --           100,000

Other Assets                                                                 23,000            26,000
-----------------------------------------------------------------------------------------------------

Total Assets                                                           $103,525,000       $99,365,000
=====================================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                                                               1
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                                     Consolidated Balance Sheets

================================================================================

<TABLE>
<CAPTION>
                                                                     March 31, 2003      June 30, 2002
                                                                     --------------      -------------
                                                                      (Unaudited)
<S>                                                                  <C>                  <C>
Liabilities and Stockholders' Equity (Deficit)
Current
     Revolving credit facility                                       $  20,013,000        $ 15,036,000
     Accounts payable                                                   12,008,000           7,180,000
     Accrued rebates                                                     1,086,000             931,000
     Accrued commissions                                                 1,059,000           1,437,000
     Accrued co-op advertising                                             908,000             740,000
     Accrued expenses                                                    1,728,000           1,577,000
     Current portion of long-term debt                                  12,080,000           7,712,000
     Current liabilities of discontinued operations                        116,000             277,000
------------------------------------------------------------------------------------------------------

Total Current Liabilities                                               48,998,000          34,890,000

Deferred Tax Liability                                                     542,000             542,000
Company Obligated Mandatorily Redeemable
     Preferred Securities of Subsidiary Trust Holding
     Solely Junior Subordinated Debentures                              57,035,000          56,951,000
------------------------------------------------------------------------------------------------------
Total Liabilities                                                      106,575,000          92,383,000
------------------------------------------------------------------------------------------------------

Stockholders' Equity (Deficit)
     Preferred stock, 1,000,000 shares authorized and unissued                  --                  --
     Common stock, $0.001 par value - shares authorized,
         75,000,000; 21,841,000 and 21,641,000 shares issued                22,000              22,000
     Additional paid-in capital                                         52,441,000          52,351,000
     Retained deficit                                                  (42,685,000)        (32,563,000)
------------------------------------------------------------------------------------------------------
                                                                         9,778,000          19,810,000

Less: Treasury Stock, 3,890,000 shares at cost                         (12,828,000)        (12,828,000)
------------------------------------------------------------------------------------------------------
Total Stockholders' Equity (Deficit)                                    (3,050,000)          6,982,000
------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity (Deficit)                 $ 103,525,000        $ 99,365,000
======================================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                                                               2
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                           Consolidated Statements of Operations

================================================================================

<TABLE>
<CAPTION>
                                                                   Three Months Ended                   Nine Months Ended
                                                                        March 31,                           March 31,
                                                                     2003              2002              2003              2002
                                                                        Unaudited                           Unaudited
                                                             ------------------------------------------------------------------
<S>                                                          <C>               <C>               <C>               <C>
Net Sales                                                    $ 24,036,000      $ 23,913,000      $ 49,538,000      $ 49,158,000
Cost of Sales                                                  12,758,000        12,559,000        28,111,000        27,512,000
-------------------------------------------------------------------------------------------------------------------------------
Gross Profit                                                   11,278,000        11,354,000        21,427,000        21,646,000
-------------------------------------------------------------------------------------------------------------------------------
Operating Expenses
      Selling and shipping                                      5,413,000         4,983,000        12,969,000        12,200,000
      General and administrative                                2,028,000         2,081,000         6,108,000         6,121,000
      Depreciation                                                176,000           187,000           539,000           561,000
      Other amortization                                          278,000           204,000           751,000           492,000
-------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses                                        7,895,000         7,455,000        20,367,000        19,374,000
-------------------------------------------------------------------------------------------------------------------------------
Income from Continuing Operations                               3,383,000         3,899,000         1,060,000         2,272,000
Other Expenses
      Refinancing and transaction costs                          (116,000)               --        (4,179,000)         (254,000)
      Interest expense, net                                    (1,998,000)       (1,811,000)       (5,658,000)       (5,318,000)
-------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Continuing Operations Before
      Income Tax and Cumulative Effect of a Change in
      Accounting Principle                                      1,269,000         2,088,000        (8,777,000)       (3,300,000)
Income Tax Expense                                                 (3,000)               --          (111,000)               --
-------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Continuing Operations Before
      Cumulative Effect of a Change in Accounting
      Principle                                                 1,266,000         2,088,000        (8,888,000)       (3,300,000)
Discontinued Operations -
      Loss from discontinued operations                           (41,000)          (39,000)       (1,234,000)         (797,000)
-------------------------------------------------------------------------------------------------------------------------------
Income (Loss) Before Cumulative Effect of a
      Change In Accounting Principle                            1,225,000         2,049,000       (10,122,000)       (4,097,000)
Cumulative effect of a change in accounting principle                  --                --                --        (9,882,000)
-------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss)                                            $  1,225,000      $  2,049,000      $(10,122,000)     $(13,979,000)
===============================================================================================================================
Per Share Amounts:
Weighted Average Common Shares
      Outstanding - Basic                                      17,951,000        17,543,000        17,863,000        17,543,000
Weighted Average Common Shares
      Outstanding - Diluted                                    18,124,000        17,915,000        17,863,000        17,543,000
Income (Loss) from Continuing Operations per
      Common Share Before Cumulative Effect of a
      Change in Accounting Principle - Basic and Diluted     $       0.07      $       0.12      $      (0.50)     $      (0.19)
Discontinued operations                                                --                --             (0.07)            (0.05)
Cumulative effect of a change in accounting principle                  --                --                --             (0.56)
-------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss)                                            $       0.07      $       0.12      $      (0.57)     $      (0.80)
===============================================================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                                                               3
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                           Consolidated Statements of Cash Flows

================================================================================

<TABLE>
<CAPTION>
Nine months ended March 31,                                                        2003             2002
--------------------------------------------------------------------------------------------------------
                                                                                      Unaudited
                                                                            ----------------------------
<S>                                                                         <C>              <C>
Cash Flows from Operating Activities:
     Net loss from continuing operations before cumulative
         effect of a change in accounting principle                         $(8,888,000)     $(3,300,000)
     Adjustments to reconcile net loss from continuing
         operations before cumulative effect of a change in accounting
         principle to net cash used in operating activities:
         Depreciation and amortization                                        2,374,000        2,203,000
         Write-off of deferred finance costs and discounts                    1,928,000          254,000
         Trust Preferred payments retained and applied against note
             receivable                                                          84,000               --
         Compensation related to stock options                                   90,000           89,000
         Payment-in-kind interest                                                80,000               --
         Changes in operating assets and liabilities:
             Accounts receivable                                             (1,018,000)      (4,610,000)
             Inventories                                                     (4,475,000)      (1,494,000)
             Prepaid expenses and other current assets                          111,000         (157,000)
             Accounts payable and accrued expenses                            4,924,000        3,347,000
             Refundable income taxes                                            268,000        1,375,000
             Other assets                                                         3,000          279,000
--------------------------------------------------------------------------------------------------------

Net Cash Used In Operating Activities                                        (4,519,000)      (2,014,000)
--------------------------------------------------------------------------------------------------------

Cash Flows from Investing Activities:
     Payments related to purchase of business                                   (17,000)              --
     Increase in officer receivables                                                 --          (31,000)
     Purchase of property and equipment                                        (707,000)        (586,000)
     Purchase of intangibles                                                   (427,000)        (329,000)
--------------------------------------------------------------------------------------------------------

Net Cash Used in Investing Activities                                        (1,151,000)        (946,000)
========================================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                                                               4
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                           Consolidated Statements of Cash Flows

================================================================================

<TABLE>
<CAPTION>
Nine months ended March 31,                                           2003             2002
-------------------------------------------------------------------------------------------
                                                                         Unaudited
                                                              -----------------------------
<S>                                                           <C>               <C>
Cash Flows from Financing Activities:
     Deferred finance costs                                   $ (1,974,000)     $(1,059,000)
     Net borrowings (payments) on lines-of-credit                4,977,000       (5,729,000)
     Proceeds from long-term debt                               12,000,000        8,250,000
     Principal payments on long-term debt                       (8,616,000)        (133,000)
-------------------------------------------------------------------------------------------
Net Cash Provided By Financing Activities                        6,387,000        1,329,000
-------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents from
     continuing operations                                         717,000       (1,631,000)
Cash used in discontinued operations                              (457,000)      (1,093,000)
-------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents               260,000       (2,724,000)

Cash and Cash Equivalents, beginning of period                     219,000        2,724,000
-------------------------------------------------------------------------------------------

Cash and Cash Equivalents, end of period                      $    479,000      $        --
===========================================================================================

Supplemental Disclosure of Cash Flow
Information
     Cash paid for interest                                   $  5,556,000      $ 5,230,000
     Cash paid (refund received) for taxes - net              $   (157,000)     $    58,000
===========================================================================================

Non-Cash Investing and Financing Activities
     Issuance of 16% subordinated notes at
        90% of face amount                                    $         --      $   600,000
     Issuance of warrants and options in
        conjunction with debt refinancing                     $         --      $   402,000
===========================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                                                               5
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

1.    The accompanying consolidated financial statements at March 31, 2003 and
      for the three months and nine months ended March 31, 2003 and 2002 are
      unaudited, but, in the opinion of management, include all adjustments
      necessary for a fair presentation of consolidated financial position and
      results of operations for the periods presented. The results for the nine
      months ended March 31, 2003 are not necessarily indicative of the results
      of operations for a full year.

2.    Refer to the audited consolidated financial statements for the year ended
      June 30, 2002, for details of accounting policies and detailed notes to
      the consolidated financial statements.

3.    Inventories consist of:

                                        March 31, 2003         June 30, 2002
      ----------------------------------------------------------------------

      Raw materials                       $ 5,751,000           $4,025,000
      Finished goods                        6,747,000            3,998,000
      ----------------------------------------------------------------------

                                          $12,498,000           $8,023,000
      ======================================================================

4.    All shipping and handling expenses are included in the selling and
      shipping caption and totaled approximately $1,936,000 and $1,622,000 for
      the three months ended March 31, 2003 and 2002 respectively and $4,369,000
      and $3,633,000 for the nine months ended March 31, 2003 and 2002
      respectively.

5.    The Company entered into a senior credit facility dated as of October 30,
      2002 for the Company and its material subsidiaries. Foothill Capital
      Corporation, which is the administrative agent for the facility, is also
      the revolving credit lender, and Ableco Finance LLC is providing a term
      loan. The total amount of the new credit facility is $35 million, of which
      $23 million is a revolving credit facility and $12 million is a term loan.
      The new credit facility matures October 30, 2005. Interest on the
      revolving credit facility is at variable annual interest rates based on
      the prime rate or LIBOR plus applicable marginal rates. Interest on the
      term loan is at variable annual interest rates based on the prime rate
      with a minimum rate of 9.75% plus 2% of accrued interest payable upon
      maturity (payment in kind interest). The interest rate on the term loan
      increases 2% each year the balance is outstanding. Borrowings on the
      revolving credit facility are limited based on eligible borrowing bases,
      effectively $23,000,000 at March 31, 2003, the maximum on the revolving
      credit facility.

      The Company and its material subsidiaries' obligations under the new
      credit facility are secured by a security interest in favor of the lenders
      in substantially all of the assets of the Company and its material
      subsidiaries. The Company and its material subsidiaries are subject to
      certain financial and other covenants under the new credit facility. At
      the end of January 2003, the Company's financial performance created a
      "Triggering Event" which increased the interest rate on the term loan in
      February and March by 2.5% points, to 14.25%. At March 31, 2003, the
      Company was in violation of a covenant and received a waiver from the
      lenders for the March 31, 2003 violation. The Company was in violation of
      a covenant at April 30, 2003 and will request a waiver from the lenders
      for the violation. Amounts outstanding under the new credit facility have
      been classified as short-term debt, as the bank waiver does not cover the
      period subsequent to March 31, 2003.




                                                                               6
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

      The Company had a financing agreement to provide $25,000,000 in senior
      secured financing. The agreement provided for a $23,000,000 revolving
      credit facility and a $2,000,000 term loan due in monthly installments of
      $33,000 plus interest. The term loan balance outstanding at June 30, 2002
      was $1,767,000. Interest on borrowings was calculated at variable annual
      rates based on either the bank's prime rate plus an applicable marginal
      rate or the federal funds rate plus an applicable marginal rate. At June
      30, 2002 the Company had $15,036,000 of borrowings outstanding under the
      revolving credit facility. These borrowings were paid in full on November
      1, 2002 with proceeds from the new financing agreements discussed above.

      The Company also had a financing agreement to provide $6,250,000 of
      subordinated debt. At June 30, 2002, the Company had borrowings
      outstanding of $5,945,000, net of discounts of $905,000, pursuant to the
      subordinated secured notes. Interest was charged on the face of the notes
      at 16% and 14% per annum, payable monthly. The issue price of the 16%
      notes was 90% of the face amount of the notes resulting in a discount of
      $600,000. In connection with this financing, the Company issued to the
      purchasers of the notes warrants to purchase up to 3.75% of the fully
      diluted common stock of the Company and an option to purchase from the
      Company certain Trust Preferred Securities of the Company's subsidiary,
      U.S. Home and Garden Trust I, that are owned by the Company, which
      resulted in an additional discount of $402,000. These borrowings were paid
      in full on November 1, 2002 with proceeds from the new financing
      agreements discussed above.

      Upon repayment of the $6,250,000 subordinated debt, the Company continues
      to have certain ongoing obligations under the subordinated debt financing
      agreement to the holders of the warrants to purchase common stock of the
      Company and option to purchase Trust Preferred Securities described above
      by virtue of these agreements. Under the option agreement, payments of
      interest on the Trust Preferred option securities is used to reduce the
      option price and is recorded as additional Trust Preferred liability. When
      the option price is reduced to zero, the Company will issue the underlying
      Trust Preferred Securities.

6.    In December 2002, the Company announced an agreement to sell assets
      comprising substantially all of its assets on a consolidated basis to a
      management group led by Richard Grandy, Chief Operating Officer of the
      Company.

      Under the terms of the agreement, Easy Gardener Products Ltd., a new
      entity owned by the management group will acquire substantially all of the
      assets and assume substantially all of the liabilities of Easy Gardener,
      Inc. and its subsidiaries, Easy Gardener, UK, Ltd, Weatherly Consumer
      Products Group, Inc. and Weatherly Consumer Products, Inc. and Ampro
      Industries, Inc. The new company will also assume the obligations of the
      parent company, US Home & Garden, Inc., (USHG) to U.S. Home & Garden Trust
      I, including the obligation to make monthly payments, which will allow the
      Trust to make distributions to holders of its Trust Preferred Securities.
      The transaction is subject to the approval of the holders of the Trust
      Preferred Securities and a proxy statement seeking such approval has been
      filed with the SEC as part of a registration statement of Easy Gardener
      Products Ltd. and U.S. Home & Garden Trust I that is subject to SEC review
      and effectiveness. The proposed sale is also subject to a number of
      additional conditions including the buyer obtaining the required
      financing.

      The Asset Purchase Agreement provides that the proposed transaction must
      be completed on or before June 30, 2003.


                                                                               7
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

      After subtracting costs of the transaction including certain estimated
      costs which the Company agrees to pay at closing, the Company expects to
      receive net cash of $18,700,000 upon the following terms: net cash of
      $17,100,000 paid at closing, and an additional $1,600,000 in the form of a
      subordinated promissory note delivered at closing.

7.    Refinancing and transaction costs included in the Consolidated Statements
      of Operations for the nine month period ended March 31, 2003 relate to the
      refinancing described in note 5 to the financial statements and the
      proposed asset sale described in note 6 to the financial statements. As a
      result of the refinancing, the Company wrote-off $1,928,000 of previously
      deferred financing costs and discounts related to the replaced financing
      agreements and also recorded fees and expenses of $2,251,000 in the nine
      months ended March 31, 2003. The Company incurred $116,000 of costs during
      the quarter ended March 31, 2003 related to the proposed asset sale. The
      Company capitalized $1,974,000 of deferred financing costs related to the
      new financing during the nine months ended March 31, 2003.

8.    In June 2002, the Company announced that is was discontinuing the
      operations conducted through its subsidiary Weed Wizard Acquisition Corp.
      ("Weed Wizard") effective September 30, 2002. Despite the Company's
      efforts to increase sales and return to profitability, Weed Wizard
      experienced continued erosion of its business. The Company plans to
      liquidate the assets and liabilities of Weed Wizard during fiscal 2003.

      Revenues for Weed Wizard for the three months and nine months ended March
      31, 2003 and 2002 were not material. The Company had a net loss from the
      discontinued operations of Weed Wizard of $41,000 and $39,000 for the
      three months ended March 31, 2003 and 2002, respectively, and $1,234,000
      and $797,000 for the nine months ended March 31, 2003 and 2002,
      respectively.

      In June 2001, the Company announced that it was discontinuing its
      e-commerce initiative, which it was conducting though its subsidiary,
      Egarden, Inc. (Egarden), effective June 30, 2001. All severance payments
      were made by June 30, 2002. No adjustments were required to the liability
      recorded for severance payments since June 30, 2001.


                                                                               8
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

      The assets and liabilities of discontinued Weed Wizard and Egarden
      operations reported in the consolidated balance sheets consist of the
      following:

                                                     March 31, 2003
             ==================================================================

                                          Weed Wizard    Egarden       Total
             ==================================================================

             Current Assets:
             Cash and cash equivalents      $     --     $63,000     $   63,000
             Accounts receivable -
                  Trade                      117,000          --        117,000
             Other current assets             34,000          --         34,000
             ------------------------------------------------------------------

             Total Current Assets           $151,000     $63,000     $  214,000
             ==================================================================

             Current Liabilities:
             Accounts payable               $  2,000     $    --     $    2,000
             Accrued expenses                 98,000      16,000        114,000
             ------------------------------------------------------------------

             Total Current Liabilities      $100,000     $16,000     $  116,000
             ==================================================================

                                                      June 30, 2002
                                          -------------------------------------

                                          Weed Wizard    Egarden       Total
             ------------------------------------------------------------------

             Current Assets:
             Cash and cash equivalents      $     --     $62,000     $   62,000
             Accounts receivable:
                  Trade                      385,000          --        385,000
                  Settlement                 195,000          --        195,000
             Inventories                     274,000          --        274,000
             Other current assets            136,000          --        136,000
             ------------------------------------------------------------------

             Total Current Assets           $990,000     $62,000     $1,052,000
             ==================================================================

             Long-Term Assets-
             Property and equipment, net    $100,000     $    --     $  100,000
             ==================================================================

             Current Liabilities:
             Accounts payable               $ 98,000     $    --     $   98,000
             Accrued expenses                163,000      16,000        179,000
             ------------------------------------------------------------------

             Total Current Liabilities      $261,000     $16,000     $  277,000
             ==================================================================


                                                                               9
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

      Pursuant to Statement of Financial Accounting Standards (SFAS) No. 144,
      Accounting for the Impairment or Disposal of Long-Lived Assets, the
      Company's consolidated financial statements and notes have been restated
      for all periods presented to reflect the discontinued components. The
      current assets and current liabilities of the discontinued components have
      been separately stated and the property and equipment of discontinued
      operations has been classified as "Held for Sale" on the balance sheet.
      The net losses and net cash flows have been reported as "Discontinued
      Operations" in the accompanying consolidated financial statements. The
      notes have been restated to exclude amounts related to these discontinued
      components.

9.    Effective July 1, 2001, the Company adopted SFAS No. 141 and SFAS No. 142
      and completed a reassessment of the useful lives of all intangible assets
      other than goodwill which total $6,641,000 and $6,398,000 (net of
      accumulated amortization of $4,081,000 and $3,008,000) at March 31, 2003
      and June 30, 2002, respectively. No adjustments to previously determined
      amortization periods were considered necessary. The Company has no
      intangible assets with indefinite useful lives other than goodwill at
      March 31, 2003.

      Amortization expense for all intangible assets having definite useful
      lives during the three months ended March 31, 2003 and 2002 was $442,000
      and $301,000, respectively, and for the nine months ended March 31, 2003
      and 2002 was $1,214,000 and $809,000, respectively. Estimated amortization
      expense for continuing operations for each of the five succeeding fiscal
      years is as follows:

                       Year Ended June 30,                  Amount
                       ---------------------------------------------

                       2003                               $1,600,000
                       2004                               $1,600,000
                       2005                               $  877,000
                       2006                               $  667,000
                       2007                               $  667,000

      The Company's previous business combinations were accounted for using the
      purchase method. As a result of such combinations, the Company has
      recognized a significant amount of goodwill, which, in the aggregate, was
      $49,878,000 and $49,861,000, net of accumulated amortization, at March 31,
      2003 and June 30, 2002, respectively.

      In conjunction with the adoption of SFAS No. 141 and SFAS No. 142, the
      Company completed its transitional goodwill impairment test. Ampro
      Industries, Inc. ("Ampro") and Golden West Agri-Products, Inc. ("Golden
      West") were the only reporting units where the carrying value exceeded the
      fair value of their net assets including goodwill. As of July 1, 2001, the
      net goodwill related to Ampro was $17,078,000. The Company hired an
      independent valuation professional to assist the Company in measuring the
      amount of the impairment. Based on the valuation, the Company recorded an
      impairment loss at the end of the prior fiscal year of $9,390,000. The net
      goodwill related to Golden West at July 1, 2001 was approximately
      $1,165,000. Based on a valuation prepared by management, an impairment
      loss was recorded at the end of the prior fiscal year of $492,000. In
      accordance with the applicable accounting literature, for interim
      reporting purposes these impairment losses were reflected as of July 1,


                                                                              10
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

      2001 and were reported as a cumulative effect of a change in accounting
      principle in the Consolidated Statements of Operations.

10.   In the normal course of business, the Company is subject to proceedings,
      lawsuits, and other claims, including proceedings under laws and
      government regulations related to product safety and other matters. Such
      matters are subject to many uncertainties, and outcomes are not
      predictable with assurance.

11.   The Company applies APB Opinion No. 25, Accounting for Stock Issued to
      Employees, and related interpretations in accounting for its employee and
      director stock option plans. Under all the Company's option plans, the
      exercise price of the options equals or exceeds the market price of the
      underlying stock on the date of the grant and therefore, no compensation
      cost is recognized.

      SFAS No. 123, Accounting for Stock-Based Compensation, requires the
      Company to provide pro forma information regarding net income and earnings
      per share as if compensation costs for the Company's employee and director
      stock options and warrants had been determined in accordance with the fair
      value based method prescribed in SFAS No. 123. The Company estimated the
      fair value of each stock option and warrant at the grant date by using a
      Black-Scholes pricing model with the following weighted-average
      assumptions used for grants in fiscal 2002: no dividend yield, expected
      volatility of approximately 75%, risk-free interest rate of 3.5%, and
      expected lives of approximately three to five years.

      The following table illustrates the effect on net income (loss) and
      earnings (loss) per share if the Company had applied the fair value
      recognition provisions of SFAS No. 123 to stock-based employee
      compensation:

<TABLE>
<CAPTION>
                                                      Three Months Ended                   Nine Months Ended
                                                           March 31,                           March 31,
                                                     2003              2002             2003              2002
                                                ==================================================================
<S>                                             <C>               <C>               <C>               <C>
      Net income (loss), as reported            $   1,225,000     $   2,049,000     $(10,122,000)     $(13,979,000)
      Deduct: Total stock-based employee
      compensation expense determined
      under fair value based method for all
      awards                                               --                --           (1,000)           (2,000)
                                                ------------------------------------------------------------------
      Pro forma net income (loss)               $   1,225,000     $   2,049,000     $(10,123,000)     $(13,981,000)
                                                ==================================================================
      Earnings (loss) per share -
           Basic and Diluted
           As reported                          $        0.07     $        0.12     $      (0.57)     $      (0.80)
           Pro forma                            $        0.07     $        0.12     $      (0.57)     $      (0.80)
</TABLE>


                                                                              11
<PAGE>

Item 2.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information included in this Report
contains statements that are forward-looking, such as statements relating to
plans for the Company's future activities. Such forward-looking information
involves important known and unknown risks and uncertainties that could
significantly affect actual results, performance or achievements in the future
and, accordingly, such actual results, performance or achievements may
materially differ from those expressed or implied in any forward-looking
statements made by or on behalf of the Company.

These risks and uncertainties include, but are not limited to, those relating to
the Company's growth strategy, customer concentration, outstanding indebtedness,
dependence on weather conditions, seasonality, expansion and other activities of
competitors, ability to successfully integrate acquired companies and product
lines, dependence on a limited number of suppliers, changes in federal or state
environmental laws and the administration of such laws, protection of trademarks
and other proprietary rights, the listing of the Company's common stock on the
over-the-counter market via the Electronic Bulletin Board, and the general
condition of the economy and its effect on the securities markets and other
risks detailed in the Company's other filings with the Securities and Exchange
Commission. The words "believe," "expect," "anticipate," "intend" and "plan" and
similar expressions identify forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date the statement was made.

General

U.S. Home & Garden Inc., ("the Company"), manufactures and markets a broad range
of brand-name consumer lawn and garden products through its wholly owned
subsidiaries, Ampro, Easy Gardener, Inc. ("Easy Gardener"), and Golden West and
Easy Gardener's wholly owned subsidiaries, Weatherly Consumer Products Group,
Inc. and Weed Wizard. In June 2002, the Company announced the discontinuation of
the Weed Wizard operations effective September 30, 2002. Since 1992, the Company
consummated eleven acquisitions of complementary lawn and garden companies and
product lines for an aggregate consideration of approximately $111,000,000 in
cash, notes and equity securities. As a result of such acquisitions, the Company
recognized a significant amount of goodwill, which, in the aggregate, was
$49,878,000 and $49,861,000, net of accumulated amortization, at March 31, 2003
and June 30, 2002, respectively.

The consumer lawn and garden market continues to become more consolidated with
fewer retailers accounting for an increasing percentage of all lawn and garden
products sold. This increasing concentration provides the largest retailers with
greater leverage over their suppliers, such as the Company. This leverage could
result in decreased margins for suppliers, including the Company, which may be
required to make greater price concessions to their large retail accounts
without being able to reduce the costs of the products sold by them to the
retailers. This leverage by the large retailers could also increase sales
volatility for the Company as well as other suppliers of lawn and garden
products.


                                                                              12
<PAGE>

Results of Operations

The following table sets forth, for the periods indicated, certain selected
financial data as a percentage of net sales:

<TABLE>
<CAPTION>
                                                           Three Months Ended         Nine Months Ended
                                                                March 31,                 March 31,
                                                            2003         2002         2003         2002
                                                           ===================       ===================
<S>                                                        <C>          <C>          <C>          <C>
Net sales                                                  100.0%       100.0%       100.0%       100.0%
Cost of sales                                               53.1         52.5         56.8         56.0
                                                           -------------------       -------------------
Gross profit                                                46.9         47.5         43.2         44.0
Selling and shipping expenses                               22.5         20.8         26.2         24.8
General and administrative expenses                          8.4          8.7         12.3         12.5
Depreciation and amortization                                1.9          1.7          2.6          2.1
                                                           -------------------       -------------------
Income from continuing operations                           14.1         16.3          2.1          4.6
Refinancing and transaction costs                           (0.5)          --         (8.4)        (0.5)
Interest expense, net                                       (8.3)        (7.6)       (11.4)       (10.8)
                                                           -------------------       -------------------
Income (loss) from continuing operations before
    cumulative effect of a change in accounting
    principle                                                5.3          8.7        (17.7)        (6.7)
Income tax expense                                            --           --         (0.2)          --
                                                           -------------------       -------------------
Income (loss) from continuing operations before
    cumulative effect of a change in accounting
    principle                                                5.3          8.7        (17.9)        (6.7)
Loss from discontinued operations                           (0.2)        (0.2)        (2.5)        (1.6)
                                                           ===================       ===================
Income (loss) before cumulative effect of a change
     in accounting principle                                 5.1          8.5        (20.4)        (8.3)
Cumulative effect of a change in accounting principle         --           --           --        (20.1)
                                                           ===================       ===================
Net income (loss)                                            5.1%         8.5%       (20.4%)      (28.4%)
                                                           ===================       ===================
</TABLE>


                                                                              13
<PAGE>

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

Net sales. Net sales increased by $123,000, or 0.5%, to $24,036,000 during the
three months ended March 31, 2003, from $23,913,000 during the comparable period
in 2002. The increase in net sales was the result of an increase in volume of
products sold to existing customers, offset in part by increased discounts,
rebates and allowances granted by the Company.

Cost of sales. Cost of sales increased by $199,000, or 1.6% to $12,758,000 for
the three months ended March 31, 2003 from $12,559,000 during the comparable
period in 2002. The increase was partially a result of the increase in sales.
Cost of sales as a percentage of net sales increased to 53.1% during the three
months ended March 31, 2003 from 52.5% during the comparable period in 2002. The
percentage increase is primarily a result of increased discounts, rebates and
allowances. Cost of sales as a percent of sales before rebates and discounts
decreased slightly.

Gross profit. Gross profit decreased by $76,000, or 0.7%, to $11,278,000 for the
three months ended March 31, 2003 from $11,354,000 during the comparable period
in 2002. Gross profit as a percentage of net sales decreased to 46.9% during the
three months ended March 31, 2003, from 47.5% during the comparable period in
2002. This decrease in gross profit dollars and as a percentage of net sales
resulted from the increased discounts, rebates and allowances as noted above.

Selling and shipping expenses. Selling and shipping expenses increased by
$430,000, or 8.6% to $5,413,000 during the three months ended March 31, 2003
from $4,983,000 during the comparable period in 2002. This increase in expense
was attributable to the increased number of smaller shipments and increased
outbound freight costs. As a percentage of net sales, selling and shipping
expenses increased to 22.5% during the three months ended March 31, 2003 from
20.8% during the comparable period in 2002.

General and administrative expenses. General and administrative expenses
decreased by $53,000 or 2.5%, to $2,028,000 during the three months ended March
31, 2003 from $2,081,000 during the comparable period in 2002 due primarily to
cost reduction measures. As a percentage of net sales, general and
administrative expenses decreased to 8.4% during the three months ended March
31, 2003 from 8.7% during the comparable period in 2002.

Depreciation and amortization. Depreciation and amortization expenses increased
by $63,000 or 16.1% to $454,000 during the three months ended March 31, 2003
from $391,000 during the comparable period in 2002. This increase is primarily
due to increased amortization of deferred financing costs. As a percentage of
net sales, depreciation and amortization expenses increased to 1.9% during the
three months ended March 31, 2003 from 1.7% during the comparable period in
2002.

Income from continuing operations. Income from continuing operations decreased
by $516,000 or 13.2% to $3,383,000 during the three months ended March 31, 2003,
from $3,899,000 during the comparable period in 2002. The decrease in income
from continuing operations was primarily due to increased discounts, rebates and
allowances and outbound freight costs being greater than the increased sales
volume as noted above. As a percentage of net sales, income from operations
decreased to 14.1% for the three months ended March 31, 2003 from 16.3% during
the comparable period in 2002.

Refinancing and transaction costs. The Company incurred $116,000 in transaction
costs during the quarter ended March 31, 2003. The Company did not incur any
refinancing and transaction costs in the comparable quarter in 2002.

Interest expense. Net interest expense increased $187,000, or 10.3% to
$1,998,000 during the three months ended March 31, 2003, from $1,811,000 during
the comparable period in 2002. The increase in interest expense is related to an
increase in borrowing levels.


                                                                              14
<PAGE>

Income taxes. Income taxes increased to $3,000 during the three months ended
March 31, 2003 from zero during the comparable quarter.

Discontinued operations. Loss from discontinued operations increased to $41,000
from $39,000 during the three months ended March 31, 2003, from the comparable
period in 2002.

Net income. Net income decreased by $824,000, or 40% to $1,225,000 during the
three months ended March 31, 2003 from $2,049,000 during the comparable period
in 2002. Net income per common share decreased to $0.07 per share for the three
months ended March 31, 2003 from net income of $0.12 per share during the
comparable period in 2002. The decrease in net income and net income per common
share is due to increased discounts, rebates and allowances, selling and
shipping costs, refinancing and transaction costs and interest expense as noted
above.

Nine Months Ended March 31, 2003 Compared to Nine Months Ended March 31, 2002

Net sales. Net sales increased by $380,000, or 0.8%, to $49,538,000 during the
nine months ended March 31, 2003, from $49,158,000 during the comparable period
in 2002. The increase in net sales was the result of an increase in volume of
products sold to existing customers, offset in part by increased discounts,
rebates and allowances.

Cost of sales. Cost of sales increased by $599,000, or 2.2% to $28,111,000 for
the nine months ended March 31, 2003 from $27,512,000 during the comparable
period in 2002 due partially to increased sales volume. Cost of sales as a
percentage of net sales increased to 56.8% during the nine months ended March
31, 2003 from 56.0% during the comparable period in 2002 due to increased
discounts, rebates and allowances noted above. Cost of sales as a percent of
sales before rebates and discounts decreased slightly.

Gross profit. Gross profit decreased by $219,000, or 1.0%, to $21,427,000 for
the nine months ended March 31, 2003 from $21,646,000 during the comparable
period in 2002. Gross profit as a percentage of net sales decreased to 43.2%
during the nine months ended March 31, 2003, from 44.0% during the comparable
period in 2002. This decrease in gross profit dollars and as a percentage of net
sales resulted from the increased discounts, rebates and allowances noted above.

Selling and shipping expenses. Selling and shipping expenses increased by
$769,000, or 6.3% to $12,969,000 during the nine months ended March 31, 2003
from $12,200,000 during the comparable period in 2002. The increase in expense
was attributable to the increased number of smaller shipments and to increased
outbound freight costs. As a percentage of net sales, selling and shipping
expenses increased to 26.2% during the nine months ended March 31, 2003 from
24.8% during the comparable period in 2002.

General and administrative expenses. General and administrative expenses
decreased by $13,000 or 0.2%, to $6,108,000 during the nine months ended March
31, 2003 from $6,121,000 during the comparable period in 2002. As a percentage
of net sales, general and administrative expenses during the nine months ended
March 31, 2003 decreased to 12.3% from 12.5% in the comparable period.

Depreciation and amortization. Depreciation and amortization expenses increased
by $237,000 or 22.5% to $1,290,000 during the nine months ended March 31, 2003
from $1,053,000 during the comparable period in 2002. This increase is primarily
due to additional amortization related to a non-compete agreement that the
Company began amortizing in October 2001 as well as increased amortization of
deferred financing costs. As a percentage of net sales, depreciation and
amortization expenses increased to 2.6% during the nine months ended March 31,
2003 from 2.1% during the comparable period in 2002.

Income from continuing operations. Income from continuing operations decreased
by $1,212,000 or 53.3% to $1,060,000 during the nine months ended March 31,
2003, from $2,272,000 during the comparable period in 2002. The decrease in
income from continuing operations was primarily due to


                                                                              15
<PAGE>

increased discounts, rebates and allowances, outbound freight costs and
amortization expenses as noted above. As a percentage of net sales, income from
continuing operations decreased to 2.1% for the nine months ended March 31, 2003
from 4.6% during the comparable period in 2002.

Refinancing and transaction costs. The Company incurred $4,179,000 in
refinancing and transaction costs during the nine months ended March 31, 2003.
Included in the above is a write-off of $1,928,000 for deferred financing costs
and discounts, $1,668,000 of fees and expenses related to the replaced financing
arrangements, and $583,000 of transaction costs. In the comparable period in the
prior year, the Company incurred a $254,000 write-off of deferred financing
costs. See Note 7 to the Consolidated Financial Statements.

Interest expense. Net interest expense increased $340,000, or 6.4% to $5,658,000
during the nine months ended March 31, 2003, from $5,318,000 during the
comparable period in 2002. The increase in interest expense is related to an
increase in borrowing levels.

Income taxes. Income taxes increased to $111,000 during the nine months ended
March 31, 2003 from zero during the comparable quarter.

Discontinued operations. Loss from discontinued operations increased to
$1,234,000 from $797,000, or 54.8% during the nine months ended March 31, 2003,
from the comparable period in 2002. The $437,000 increase in loss from
discontinued operations is primarily due to legal costs associated with settling
the U.S. Consumer Products Safety Commission ("CPSC") and A.A.B.B., Inc.
litigation and a write-down of assets, offset in part by management's decision
to discontinue selling Weed Wizard products as of September 30, 2002.

Cumulative effect of a change in accounting principle. The cumulative effect of
a change in accounting principle during the nine months ended March 31, 2002
resulted from the transitional goodwill impairment test required in conjunction
with the adoption of SFAS No. 142. The recording of an impairment loss of
$9,882,000, which is primarily related to the Ampro operations, is reflected as
a cumulative effect of a change in accounting principle. See Note 9 to the
Consolidated Financial Statements.

Net loss. Net loss decreased by $3,857,000 to $10,122,000 during the nine months
ended March 31, 2003 from a net loss of $13,979,000 during the comparable period
in 2002. Net loss per common share decreased to $0.57 per share for the nine
months ended March 31, 2003 from a net loss of $0.80 per share during the
comparable period in 2002. The decrease in net loss and net loss per common
share is due primarily to the cumulative effect of a change in accounting
principle recorded in the three months ended September 30, 2001 of $9,882,000
noted above, offset in part by the refinancing and transaction costs recorded in
the nine months ended March 31, 2003 of $4,179,000 and the other matters as
noted above.

Seasonality

The Company's sales are seasonal due to the nature of the lawn and garden
business, in parallel with the annual growing season. The Company's sales and
shipping are most active from late March through May when home lawn and garden
customers are purchasing supplies for spring planting and retail stores are
increasing their inventory of lawn and garden products. The buying pattern of
retailers, including our retail customers, is changing and stores are
replenishing their inventory when sales are made by them rather than buying
large quantities of inventory in advance of the selling season. Sales typically
decline in mid-summer.

Sales of the Company's agricultural products, which were not material during the
three and nine months ended March 31, 2003, are also seasonal. Most shipments
occur during the agricultural cultivation period from March through October.


                                                                              16
<PAGE>

Liquidity and Capital Resources

Since inception, the Company has financed its operations primarily through cash
generated by operations, net proceeds from the Company's private placements and
public sales of securities and borrowings from lending institutions.

At March 31, 2003, the Company had consolidated cash and short-term investments
totaling $479,000, and a working capital deficit of $6,844,000. At June 30,
2002, the Company had consolidated cash and short-term investments totaling
$219,000, and working capital of $2,728,000. The decrease in working capital was
attributable to classifying borrowings under the Company's revolving and
long-term credit facilities as short term liabilities due to the covenant
violations discussed below.

Net cash used in operating activities for the nine months ended March 31, 2003
of $4.5 million consisted primarily of the net loss from continuing operations
of $8.9 million adjusted for non-cash expenses of $4.6 million and an increase
in accounts receivable and inventory of $5.5 million. This was offset in part by
an increase in accounts payable and accrued expenses of $4.9 million. The
increase in accounts receivable and inventory and accounts payable and accrued
expenses is consistent with the seasonal nature of the Company's business.

Net cash used in investing activities for the nine months ended March 31, 2003
of $1.2 million is primarily due to capital purchases of equipment and
intangible assets.

Net cash provided by financing activities for the nine months ended March 31,
2003 of $6.4 million is primarily due to an increase in long-term debt and the
line of credit and amounts paid for deferred finance costs in conjunction with
the new financing.

The Company entered into a senior credit facility dated as of October 30, 2002
for the Company and its material subsidiaries. Foothill Capital Corporation,
which is the administrative agent for the facility, is also the revolving credit
lender, and Ableco Finance LLC is providing a term loan. The total amount of the
new credit facility is $35 million, of which $23 million is a revolving credit
facility and $12 million is a term loan. The new credit facility matures October
30, 2005. Interest on the revolving credit facility is at variable annual
interest rates based on the prime rate or LIBOR plus applicable marginal rates.
Interest on the term loan is at variable annual interest rates based on the
prime rate with a minimum rate of 9.75% plus 2% of accrued interest payable upon
maturity (payment in kind interest). The interest rate on the term loan
increases 2% each year the balance is outstanding. Borrowings on the revolving
credit facility are limited based on eligible borrowing bases, effectively
$23,000,000 at March 31, 2003, the maximum on the revolving credit facility.

The Company and its material subsidiaries' obligations under the new credit
facility are secured by a security interest in favor of the lenders in
substantially all of the assets of the Company and its material subsidiaries.
The Company and its material subsidiaries are subject to certain financial and
other covenants under the new credit facility. At the end of January 2003, the
Company's financial performance created a "Triggering Event" which increased the
interest rate on the term loan in February and March by 2.5% points, to 14.25%.
At March 31, 2003, the Company was in violation of a covenant and received a
waiver from the lenders for the March 31, 2003 violation. The Company was in
violation of a covenant at April 30, 2003 and will request a waiver from the
lenders for the violation. Amounts outstanding under the new credit facility
have been classified as short-term debt, as the bank waiver does not cover the
period subsequent to March 31, 2003.

The Company had a financing agreement to provide $25,000,000 in senior secured
financing. The agreement provided for a $23,000,000 revolving credit facility
and a $2,000,000 term loan due in monthly installments of $33,000 plus interest.
The term loan balance outstanding at June 30, 2002 was $1,767,000. Interest on
borrowings was calculated at variable annual rates based on either the bank's
prime rate plus an applicable marginal rate or the federal funds rate plus an
applicable marginal rate. At June 30, 2002 the Company had $15,036,000 of
borrowings outstanding under the revolving credit facility. These borrowings
were paid in full on November 1, 2002 with proceeds from the new financing
agreements discussed above.


                                                                              17
<PAGE>

The Company also had a financing agreement to provide $6,250,000 of subordinated
debt. At June 30, 2002, the Company had borrowings outstanding of $5,945,000,
net of discounts of $905,000, pursuant to the subordinated secured notes.
Interest was charged on the face of the notes at 16% and 14% per annum, payable
monthly. The issue price of the 16% notes was 90% of the face amount of the
notes resulting in a discount of $600,000. In connection with this financing,
the Company issued to the purchasers of the notes warrants to purchase up to
3.75% of the fully diluted common stock of the Company and an option to purchase
from the Company certain Trust Preferred Securities of the Company's subsidiary,
U.S. Home and Garden Trust I, that are owned by the Company, which resulted in
an additional discount of $402,000. These borrowings were paid in full on
November 1, 2002 with proceeds from the new financing agreements discussed
above.

Upon repayment of the $6,250,000 subordinated debt, the Company continues to
have certain ongoing obligations under the subordinated debt financing agreement
to the holders of the warrants to purchase common stock of the Company and
option to purchase Trust Preferred Securities described above by virtue of these
agreements. Under the option agreement, payments of interest on the Trust
Preferred option securities is used to reduce the option price and is recorded
as additional Trust Preferred liability. When the option price is reduced to
zero, the Company will issue the underlying Trust Preferred Securities.

Commitments

The Company leases office and warehouse space, certain office equipment and
automobiles under operating leases expiring through 2006. The future minimum
annual lease payments under these non-cancelable operating leases are as
follows:

                    Year Ended June 30,                       Amount
                    ------------------------------------------------

                    2003                                  $  843,000
                    2004                                     731,000
                    2005                                     484,000
                    2006                                     252,000
                    2007                                      55,000
                    ------------------------------------------------
                                                          $2,365,000
                    ------------------------------------------------

Critical Accounting Policies

The preparation of financial statements requires the adoption and implementation
of accounting policies and the use of assumptions and estimates in their
presentation. The accounting policies and uncertainties, judgments and estimates
make it likely that materially different amounts would be reported under
different conditions and different assumptions.

The Company has included below a discussion of the more critical accounting
policies that are affected by the significant judgments and estimates used in
the preparation of the financial statements, how such policies are applied, and
how results differing from the estimates and assumptions would affect the
amounts presented in the financial statements. Other accounting policies also
have a significant effect on the financial statements, and some of these
policies also require the use of estimates and assumptions as discussed in the
Summary of Accounting Policies in the Company's Consolidated Financial
Statements at June 30, 2002.

Allowance for Doubtful Accounts Receivable and Sales Returns. The Company
maintains an allowance for doubtful accounts receivable, which represents the
potential estimated losses resulting from the inability of customers to make
required payments for amounts owed. The allowance is estimated based on
historical experience of write-offs, the level of past due amounts and
information known about specific customers with respect to their ability to make
payments at the balance sheet date. If the financial condition of the


                                                                              18
<PAGE>

Company's customers were to change, resulting in an impairment or improvement in
their ability to make payments, additional allowances may be required or
allowances may be reduced.

The Company also maintains an allowance for sales returns. The Company does not
have formal agreements with customers that allow the return of product. The
Company reviews requests to return product on a case-by-case basis. An accrual
is made for authorized returns.

Inventories. The Company records inventory reserves for estimated obsolescence
of inventory equal to the difference between the cost of inventory owned and the
estimated market value. Market value is based upon the age of specific inventory
on hand and assumptions about future demand and market conditions. If actual
market conditions for the sale of the inventory are less favorable than those
anticipated by management, additional reserves may be required.

Goodwill. The Company has consummated eleven acquisitions accounted for using
the purchase method. The excess of cost over net assets acquired which relates
to these acquisitions has been recorded as goodwill. Goodwill is tested for
impairment by comparing the carrying value of the assets of individual reporting
units to their fair value. The fair value of the assets could vary significantly
over time and different assumptions and estimates will result in different
valuations.

Deferred Income Taxes. The Company records deferred income taxes based on
enacted income tax rates in effect on the dates temporary differences between
the financial reporting and tax bases of assets and liabilities reverse. To the
extent that available evidence about the future raises doubt about the
realization of a deferred tax asset, a valuation allowance is established. The
Company has recorded a valuation allowance due to the uncertainty of its ability
to generate sufficient future taxable income to realize the gross deferred tax
assets. If the Company is able to generate future taxable income, the valuation
allowance may be adjusted.

New Accounting Pronouncements

In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS No.
145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections". SFAS No. 4 required all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an extraordinary item, net of related income tax effect. SFAS No. 145
requires any gain or loss from the extinguishment of debt to meet the
requirements of APB No. 30, "Reporting the Results of Operations - Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions", to be classified as an
extraordinary item, otherwise the item would be classified in the results of
continuing operations. Any gain or loss on extinguishment of debt that was
classified as an extraordinary item in prior periods that does not meet the
criteria of APB No. 30 for classification as an extraordinary item shall be
reclassified. The provisions of the statement related to the rescission of SFAS
No. 4 are applicable for the Company for the fiscal year ended June 30, 2003.
The adoption of SFAS No. 145 did not have an effect on the Company's financial
statements for the periods presented.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities". SFAS No. 146 addresses financial accounting
and reporting for costs associated with exit or disposal activities and
nullifies EITF Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity." The provisions of
this statement are effective for exit or disposal activities that are initiated
after December 31, 2002. The adoption of SFAS No. 146 did not have an effect on
the Company's financial statements.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure". SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock-Based Compensation" to provide alternative methods of
transition for a voluntary change to the fair value based method of


                                                                              19
<PAGE>

accounting for stock-based employee compensation. In addition, this statement
amends the disclosure requirements of SFAS No. 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. The provisions of the statement are effective for the
Company for the quarter ended March 31, 2003. The Company adopted SFAS No. 148
during the quarter ended March 31, 2003.

Inflation

Inflation has historically not had a material effect on the Company's
operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a result of its variable rate revolving credit line, the Company is exposed
to the risk of rising interest rates. The following table provides information
on the Company's fixed maturity debt as of March 31, 2003 that are sensitive to
changes in interest rates.

The Revolving Credit Facility had an interest
rate of 5.25% for the period ended
March 31, 2003                                          $20.0 million

The Term Loan had interest rates of 11.75% and
14.25% for the period ended March 31, 2003              $12.1 million

Item 4. Controls and Procedures

Within the 90-day period prior to the filing of this report, an evaluation was
carried out under the supervision and with the participation of the Company's
management, including the Chief Executive Officer ("CEO") and the Chief
Financial Officer ("CFO"), of the effectiveness of the Company's disclosure
controls and procedures. Based on that evaluation, the CEO and CFO have
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in reports that
it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms. Subsequent to the date of
their evaluation, there were no significant changes in the Company's internal
controls or in other factors that could significantly affect the internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

PART II - OTHER INFORMATION

Item 5. Other Information

      As previously disclosed, in December 2002 the Company entered into an
      Asset Purchase Agreement to sell substantially all of the assets of
      certain of its subsidiaries to a management group led by Richard Grandy,
      the Chief Operating Officer of the Company. The Asset Purchase Agreement
      provides that the transaction must be closed on or before June 30,
      2003.

      At the time in November 2002 that the Company repaid all amounts
      outstanding under its subordinated debt facility the Company also entered
      into a settlement agreement with the holders of the repaid subordinated
      debt, in which they irrevocably agreed and consented to the Company's
      execution of the asset purchase agreement and the consummation of the
      transactions contemplated by that agreement, provided certain conditions
      are met prior to the closing. Agreement of these former debt holders to
      the proposed asset sale was required under the terms of the then existing
      agreements they had with the Company.


                                                                              20
<PAGE>

      The conditions to the consent included the following:

            o     that Easy Gardener Products Ltd. become the obligor under the
                  Trust documents;

            o     that Easy Gardener Products Ltd. acquire the 251,981 Trust
                  Preferred Securities currently owned by the Company;

            o     that Easy Gardener Products Ltd. grant to these former
                  subordinated lenders options to purchase 189,750 of the
                  foregoing Trust Preferred Securities, in replacement of the
                  currently existing options granted to them by the Company
                  which are exercisable for the purchase of only 94,875 of these
                  Trust Preferred Securities;

            o     that the former subordinated debtholders and related parties
                  receive the monies due to them under the settlement agreement
                  (an estimated $1,145,000) at the closing of the asset sale;
                  and

            o     that the Company receive no less than approximately $16.5
                  million of immediately available cash proceeds at the closing.

      The settlement agreement also provides for certain amendments to the Trust
      Preferred options held by these former debtholders and provides that, upon
      the closing of the proposed asset sale and the satisfaction of the
      foregoing conditions, the warrants to purchase common stock of the Company
      held by these former debtholders will be amended and certain obligations
      of the Company and Easy Gardener Inc. to these holders and related parties
      that survived the November 2002 repayment of the subordinated loan
      facility, will expire.

      Commencing April 18, 2003, the Company's common stock ceased trading on
      Nasdaq and commenced trading on the over-the-counter bulletin board.

Item 6. Exhibits and Reports on Form 8-K

(a)   Exhibits

      99.1  Certification of the Chief Executive Officer pursuant to section 906
            of the Sarbanes-Oxley Act of 2002

      99.2  Certification of the Chief Financial Officer pursuant to section 906
            of the Sarbanes-Oxley Act of 2002

(b)   No reports on Form 8-K were filed during the quarter ended March 31, 2003.

                                   SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

May 14, 2003

                                            U.S. Home & Garden Inc.
                                                       (Registrant)


                                        By: /s/ Robert Kassel
                                            ------------------------------------
                                            President, Chief Executive Officer


                                        By: /s/ Richard Kurz
                                            ------------------------------------
                                            Chief Financial Officer


                                                                              21
<PAGE>

                             U.S. Home & Garden Inc.

                  Certification of Principal Executive Officer

I, Robert Kassel, President and Chief Executive Officer of U.S. Home & Garden
Inc., certify that:

1.    I have reviewed this quarterly report on Form 10-Q of U.S. Home & Garden
      Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report.

4.    The registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

            a.    designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

            b.    evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

            c.    presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.    The registrant's other certifying officer and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent functions):

            a.    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

            b.    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.    The registrant's other certifying officer and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

Date: May 14, 2003


                                            /s/ Robert Kassel
                                            ------------------------------------
                                            Robert Kassel
                                            Chief Executive Officer
                                            (Principal Executive Officer)


                                                                              22
<PAGE>

                             U.S. Home & Garden Inc.

                  Certification of Principal Financial Officer

I, Richard Kurz, Chief Financial Officer of U.S. Home & Garden Inc., certify
that:

1.    I have reviewed this quarterly report on Form 10-Q of U.S. Home & Garden
      Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report.

4.    The registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

            a.    designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

            b.    evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

            c.    presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.    The registrant's other certifying officer and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent functions):

            a.    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

            b.    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.    The registrant's other certifying officer and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

Date: May 14, 2003


                                            /s/ Richard Kurz
                                            ------------------------------------
                                            Richard Kurz
                                            Chief Financial Officer
                                            (Principal Financial Officer)


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